Napstercom

.. e would be more likely to purchase them. In this case, Napster could continue, serving it’s purpose as a ‘try before you buy’ application for the music industry. Just as people still purchase and rent videos even though they can record movies from TV and borrow tapes from friends, people will continue to buy CDs, and will be encouraged even more so if prices are reduced and extras given away with the music. Music industry players such as BMG (Bertelsmann Music Group), EMI, Sony and Universal are already launching efforts to combat Napster and take advantage of the opportunities the Internet offers (http://www.theregister.co.uk/content/6/12778.html ).

These companies are launching their own MP3 sales and distribution services, or offering subscription services that allow registered users to download unlimited tracks for a limited time. It is also worth noting that e-music.com already offers this type of service, including a monthly subscription service. However, on e-music, users can download unlimited MP3s from a number of labels, whereas the label MP3 distribution sites will exclusively distribute the record label’s MP3s. Perhaps eventually sites like e-music.com will partner with all labels, including the bigger ones and will offer a better service (faster downloads, better quality files, more variety etc) than Napster can. However, the fact that over US$15 million has been invested in Napster Inc means that Napster will not die easily. If the RIAA is successful in it’s current lawsuit against the company, Napster will just change direction.

A few solutions have been suggested. Probably the most practical and realistic alternative that has been suggested is that Napster Inc pays royalties to artists when their songs are downloaded, much like the radio pays artists when their songs are played. Another solution is that Napster could work with the music industry to distribute certain sample tracks to the public. These tracks could be distributed royalty-free as promotion for the album, or Napster could agree to pay royalties. Another solution being adopted by other similar information-sharing applications like Napster, Freenet and Gnutella is to make file transfers over the application anonymous. Adding to that, the fact that the central servers themselves do not have to contain any copyrighted files, tracking down users breaching copyright legislation will be incredibly difficult.

The option of Napster paying royalties to artists whose songs are downloaded would be a positive move because it would mean that artists receive fair compensation for their work. However, on the other hand, to support the enormous cost of such a move, Napster would either have to turn into a paid subscription service, or show advertising (which wouldn’t necessarily cover the costs). Added to this, the cost of modifying the application, and working out a way to determine what songs have been downloaded, the administration costs for Napster would skyrocket. The option of a cooperative effort with the music industry has the advantage of being totally legal and stopping all conflicts between Napster and the RIAA. However, such a model would mean a great reduction in the number of songs available and would eliminate the ‘sharing’ aspect of the program. The advantage of the anonymous peer-to-peer model is that if no corporation, individual or other entity claims ownership, no one can be sued. And because no files are stored on the central server, no copyright is being infringed there.

The disadvantage of this method, would be that Napster would still be breaking the law, and undoubtedly new legislation would be brought in and measures would be taken to stop the service. Furthermore, if Napster could not take credit officially for their software, then they could not profit from it (something they need to do, considering the investment in the company) I believe that Napster is a valuable program and an indication of things to come. However, in its current state, it will have a very hard time remaining legal. I believe the only way Napster will survive will be to change its service (and it may in fact be forced to by the courts). I would suggest that Napster develops some system of paying royalties to artists whose songs are downloaded over their software.

It is really the only practical way that Napster can continue and even though it will cost the company a lot to implement this system, it will mean that Napster will be safe from litigation by the music industry. It will mean that Napster users will no longer have to worry that they are breaking the law, and will encourage artists to embrace online distribution. I would recommend that Napster subsidises the cost of the royalty payments by showing advertising within the application (much like GetRight (http://www.getright.com/) and CuteFTP (http://www.cuteftp.com) do). This advertising could be used by advertisers to target music enthusiasts, meaning increased revenue for Napster. I believe that if the royalty option, subsidised by advertising is implemented, Napster will be able to continue safely and profitably. Bibliography 6.